Correlation Between ATN International and Gogo

Can any of the company-specific risk be diversified away by investing in both ATN International and Gogo at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ATN International and Gogo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATN International and Gogo Inc, you can compare the effects of market volatilities on ATN International and Gogo and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ATN International with a short position of Gogo. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATN International and Gogo.

Diversification Opportunities for ATN International and Gogo

-0.71

Correlation Coefficient

ATN International  Gogo

Pay attention - limited upside

The 3 months correlation between ATN and Gogo is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ATN International and Gogo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gogo Inc and ATN International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ATN International are associated (or correlated) with Gogo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gogo Inc has no effect on the direction of ATN International i.e., ATN International and Gogo go up and down completely randomly.

Pair Corralation between ATN International and Gogo

Given the investment horizon of 90 days ATN International is expected to under-perform the Gogo. But the stock apears to be less risky and, when comparing its historical volatility, ATN International is 1.07 times less risky than Gogo. The stock trades about -0.13 of its potential returns per unit of risk. The Gogo Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  745.00  in Gogo Inc on September 12, 2024 and sell it today you would earn a total of  33.00  from holding Gogo Inc or generate 4.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

ATN International  vs.  Gogo Inc

ATN International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATN International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Gogo Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gogo Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Gogo may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ATN International and Gogo

The main advantage of trading using opposite ATN International and Gogo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATN International position performs unexpectedly, Gogo can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Gogo will offset losses from the drop in Gogo's long position.

The idea behind ATN International and Gogo Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.